REPORT OF THE NUCLEAR REGULATION
This report summarizes decisions and policy developments that have
occurred in the area of nuclear power regulation. The timeframe covered by this
report is July 1, 2007 to May 31, 2008.
I. NRC Related Litigation ................................................................................. 789
A. Nuclear Information and Resource Service and Public Citizen v.
NRC ................................................................................................. 789
B. Massachusetts v. United States.......................................................... 791
C. United States v. Eurodif S.A. and USEC Inc. v. Eurodif S.A. .......... 792
II. Other Developments ..................................................................................... 793
A. Final Policy Statement on the Conduct of New Reactor
Licensing Proceedings ................................................................... 793
B. FERC Mandatory Reliability Standard for Nuclear Plant
Coordination .................................................................................... 793
1. Enforcement/Risk Factors. ........................................................... 794
2. Disputes. ...................................................................................... 795
3. Integrated Utilities. ...................................................................... 795
C. United States Ratification of the Convention on Supplementary
Compensation for Nuclear Damage ................................................. 795
I. NRC RELATED LITIGATION
A. Nuclear Information and Resource Service and Public Citizen v. NRC1
This case involved judicial review of the Nuclear Regulatory Commission‟s
(NRC) decisions leading to the issuance of a license to Louisiana Energy
Services (LES) to construct and operate a uranium enrichment facility in New
Mexico.2 The petitioners, Nuclear Information and Resource Service and Public
Citizen, raised an assortment of environmental and safety issues before the D.C.
Circuit.3 In a decision issued December 11, 2007, the court affirmed the NRC
licensing decision on all counts.4
First, the D.C. Circuit dealt with petitioners‟ procedural claim that the NRC
violated the licensing provisions of the Atomic Energy Act by “supplementing”
the Environmental Impact Statement (EIS) for the facility after the close of
hearings on the license application.5 In this regard, the Atomic Energy Act
mandates that the EIS for the facility “shall be prepared before the hearing on
1. Nuclear Info. & Res. Serv. V. NRC, 509 F.3d 562, 565-571 (D.C. Cir. 2007).
2. Id. at 565.
3. Id. at 565-566.
4. Id. at 571.
5. Id. at 568.
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the issuance of a license....”6 Although the NRC had issued an EIS for the LES
facility prior to the adjudicatory hearing, it had supplemented the EIS with later
rulings and opinions in the case.7 Despite this fact, the court found that the
agency still “prepared” an EIS before the hearing was completed, which is all the
Atomic Energy Act requires.8
Second, the court addressed the petitioners‟ substantive claim that the
NRC‟s review under the National Environmental Policy Act (NEPA) was
deficient.9 In particular, the “[p]etitioners argue[d] that the NRC‟s NEPA review
was deficient because the NRC did not sufficiently analyze the impact of
disposal of uranium waste [primarily depleted uranium] from the enrichment
facility.”10 In rejecting this argument, the court found that “the record makes
clear that the NRC thoroughly considered the environmental issues surrounding
uranium waste disposal.”11
Third, the court addressed the petitioners‟ “argu[ment] that the NRC erred
in approving the license because, in [their] view, LES failed to present a
reasonable cost estimate for disposing of radioactive waste from the facility.”12
The court noted that under NRC precedent an applicant for a license for a
uranium enrichment facility “must present a plausible strategy for the
disposition of depleted uranium waste.”13 The court observed that “[t]he NRC
granted the license here based on LES‟s „public-sector strategy,‟ in which the
Department of Energy would take title to and dispose of the facility‟s waste.”14
The court, acknowledging the deference owed to the agency, found this a
reasonable and permissible decision:
As a reviewing court, our role here is necessarily limited: We are not authorized to
micromanage the NRC‟s licensure proceeding, or to second-guess its acceptance of
reasonable cost estimates. We examine only whether the NRC reasonably
concluded that LES presented a plausible strategy for waste disposal and a
reasonable cost estimate to accompany that strategy – the plausible strategy being
disposal by the Department of Energy, and the cost estimate including a 25-percent
contingency above the Department‟s estimate for the costs of near-surface disposal.
We have no basis on this record, particularly given our deferential review, to
disturb the NRC‟s determination that LES‟s cost estimate based on near-surface
disposal was reasonable.
Finally, the court rejected the petitioners‟ argument “that NRC
Commissioner McGaffigan... should have disqualified himself from considering
the license application”16 based on remarks he made “in an unrelated
proceeding”17 questioning the technical capability of one of the petitioners. As
6. Id. citing Atomic Energy Act, 42 U.S.C. § 2243(a)(2) (2000) (emphasis in original).
10. Id. at 569.
13. Id. citing In re La. Energy Servs., L.P., 34 NRC 332, 337 (1991) (emphasis in original).
15. Id. at 570-571 (emphasis in original).
16. Id. at 571.
2008] NUCLEAR REGULATION COMMITTEE REPORT 791
the court stated, “[g]iven the roles that agency officials must play in the give-
and-take of sometimes rough-and-tumble policy debates, courts must tread
lightly when presented with this kind of challenge.”18
B. Massachusetts v. United States19
The Commonwealth of Massachusetts sought judicial review in the First
Circuit of the NRC‟s refusal to hear Massachusetts‟ contentions in the license
renewal proceedings for the Pilgrim and Vermont Yankee nuclear power
plants.20 In the proceedings before the NRC, Massachusetts sought to participate
as a party and submitted contentions under the National Environmental Policy
Act (NEPA) claiming that the NRC had failed to examine adequately the
environmental consequences of potential zirconium fires occurring in the plants‟
spent fuel pools.21 The NRC‟s Atomic Safety and Licensing Board panels, and
subsequently the Commission, ruled that the contentions were inadmissible for
litigation and denied Massachusetts party status in the proceedings.22
The agency ruled in essence that the contentions were an impermissible
collateral attack on the findings in the NRC‟s Generic Environmental Impact
Statement (GEIS) for license renewal.23 The NRC‟s GEIS categorized spent fuel
storage as a “Category 1 issue,” finding that storing spent fuel in pools for an
additional twenty-year renewal period would have insignificant environmental
impacts.24 The effect is that “generic Category 1 issues cannot be litigated in
individual licensing adjudications.”25 In light of the NRC‟s ruling,
Massachusetts submitted a petition for rulemaking pursuant to seek a change in
the NRC‟s environmental regulations for renewal on this issue.26
Massachusetts also sought judicial review, in the First Circuit, of the
Commission‟s decision rejecting its contentions.27 On appeal, the NRC took the
litigation position that Massachusetts could seek to participate in the proceedings
as an interested state, and in addition could then petition to suspend the
proceedings under 10 C.F.R. section 2.802(d) pending disposition of its petition
In a decision handed down on April 8, 2008, the First Circuit held that the
NRC acted within its authority when it rejected Massachusetts‟ proposed
contentions and denied it party status in the two proceedings.29 However, the
court stated that it expects the NRC to adhere to the representations and position
it took during the appeal to the effect that Massachusetts could participate in the
19. Massachusetts v. U.S., 522 F.3d 115, 117-133 (2008).
20. Id. at 117-118.
21. Id. at 121-122.
22. Id. at 124-125.
23. Id. at 125.
24. Id. at 121, 121 n.4.
25. Id. at 127 (citations omitted).
26. Id. at 125-126.
27. Id. at 126.
28. Id. at 125 citing 10 C.F.R. § 2.802(d) (2003).
29. Id. at 129-130.
792 ENERGY LAW JOURNAL [Vol. 29:789
proceedings as an interested state and request that the NRC delay issuance of
renewed licenses for the plants until the commonwealth‟s petition for
rulemaking is resolved.30 In doing so, the court indicated that a petition for
rulemaking is an appropriate way for the NRC to address new and significant
information relating to its environmental review for license renewal.31
To allow Massachusetts a meaningful opportunity to participate in the NRC
license renewal proceedings, the Court granted a brief stay of the close of the
hearings in both cases (for fourteen days from the date of issuance of the Court‟s
mandate).32 Massachusetts filed a notice of intent to participate as an interested
state in the proceedings on May 8, 2008.
C. United States v. Eurodif S.A. and USEC Inc. v. Eurodif S.A.33
On April 21, 2008, the Supreme Court granted certiorari in two related
cases to examine the correct application of federal antidumping statutes to
“separative work unit” (SWU) contracts for uranium enrichment services and the
production of low enriched uranium (LEU) for nuclear fuel.34 The United States
had sought certiorari in this matter, which is believed to the first time the United
States government has sought the Supreme Court‟s review in an antidumping
The petition for certiorari challenges a ruling by the United States Court of
Appeals for the Federal Circuit in two cases involving the importation of LEU
from Europe.35 In those cases, United States nuclear utilities purchased
unenriched natural uranium and delivered it to European uranium enrichers, paid
the enrichers for the service of enriching the uranium, and received back LEU
product.36 The Federal Circuit, rejecting the view of the Commerce Department
and affirming the Court of International Trade, ruled that this method of
acquiring LEU constitutes the purchase of a service, not a good, and therefore is
not subject to the antidumping law, which applies to imported products sold or
likely to be sold in the United States.37
In its petition for certiorari, the United States argued that the Federal
Circuit‟s decision opens a “potentially gaping loophole” in United States trade
law that would allow foreign sellers and domestic buyers of various products to
avoid the antidumping laws by structuring their transactions as contracts for
services along the lines of the SWU contracts.38 The cases have been
30. Id. at 129 n.8, 130.
32. Id. at 130.
33. United States v. Eurodif S.A., 506 F.3d 1051 (Fed. Cir. 2007), cert. granted, 128 S. Ct. 2054 (2008);
USEC Inc. v. Eurodif S.A., 506 F.3d 1051 (Fed. Cir. 2007), cert. granted, 128 S. Ct. 2056 (2008).
35. Petition for Writ of Certiorari, United States v. Eurodif S.A., 2008 WL 437010 (2008); see also,
Petition for Writ of Certiorari, USEC Inc. v. Eurodif S.A., 2008 WL 465552 (2008).
36. Eurodif S.A. v. United States, 411 F.3d 1355, 1357-1359 (Fed. Cir. 2005); Eurodif S.A. v. United
States, 423 F.3d 1275, 1278 (Fed. Cir. 2005).
37. Eurodif S.A. v. United States, 411 F.3d 1355, 1362 (Fed. Cir. 2005); Eurodif S.A. v. United States,
423 F.3d 1275, 1278 (Fed. Cir. 2005).
38. Petition for Writ of Certiorari, United States v. Eurodif S.A., 2008 WL 437010 (2008); see also,
Petition for Writ of Certiorari, USEC Inc. v. Eurodif S.A., 2008 WL 465552 (2008).
2008] NUCLEAR REGULATION COMMITTEE REPORT 793
consolidated for review and will be argued and decided during the Supreme
Court‟s next term, beginning in October 2008.
II. OTHER DEVELOPMENTS
A. Final Policy Statement on the Conduct of New Reactor Licensing
On April 17, 2008, the NRC issued a Final Policy Statement on the Conduct
of New Reactor Licensing Proceedings, updating its policy for the expected
increase in hearings for new nuclear power plant license applications.39 Among
the key policy revisions are the following:
The NRC aims to improve the hearing process by allowing for
common issues across multiple combined license applications
(COLAs) referencing the same standardized design to be
determined in a single hearing. While the COLAs must be
submitted relatively close in time to be consolidated into such a
combined hearing, the NRC notes that subsequent applicants
referencing the same standard reactor design can potentially benefit
from the general findings made during an earlier hearing;
The Policy Statement clearly sets forth the position that issues
relating to a standard reactor design under a design certification
review should be resolved in the design certification rulemaking,
and not in a related COL hearing. Further, if the initial reference
COL for a given standardized design resolves a specific issue, the
NRC staff need only confirm that a subsequent applicant has
adopted and implemented an identical approach; and
The Commission states in the Policy Statement that it will preside
over any request for a hearing on a specific plant‟s completion of
the inspections, tests, analyses and acceptance criteria, known as
ITAAC, needed to demonstrate that plant construction has been
completed in compliance with applicable requirements and that the
plant will operate safely.40
The NRC‟s revised policy does not alter the public‟s right to petition to
intervene on issues in a specific application, nor does it deviate from the NRC‟s
traditional adjudicatory hearing policy objectives. Rather, the NRC believes that
the new protocol will help to ensure a fair hearing process while at the same time
avoiding inefficient and unnecessary procedural delays for new reactors.41
B. FERC Mandatory Reliability Standard for Nuclear Plant Coordination
The Federal Energy Regulatory Commission (FERC) published a proposed
rule on March 28, 2008, to approve the reliability standard issued by the North
American Electric Reliability Corporation (NERC) for coordination between
39. Final Policy Statement, Conduct of New Reactor Licensing Proceedings, 73 Fed. Reg. 20,963
40. Id. at 20,964 – 20,973.
41. Id. at 20,973.
794 ENERGY LAW JOURNAL [Vol. 29:789
nuclear power plants and transmission entities.42 The proposed rule would
approve the NERC‟s Nuclear Plant Interface Coordination Reliability Standard
The Reliability Standard requires nuclear power plants and the transmission
entities that serve them to establish Nuclear Plant Interface Requirements
(NPIRs) to govern communications, and coordinated operations and planning to
ensure safe nuclear plant operation and shutdown during grid disturbances or
plant events.44 Among the specific compliance requirements of the Reliability
Nuclear plant operators and transmission entities must enter into
interface agreements specifying mutually acceptable NPIRs;
Transmission entities are to incorporate the NPIRs into planning
and operating analyses, and communicate with nuclear plant
operators when they lose the ability to assess system performance;
Nuclear operators and transmission entities are to coordinate
outages and maintenance activities in a manner consistent with the
interface agreements; and
Nuclear operators and transmission entities must notify each other
of changes that affect the NPIRs.45
The FERC‟s proposed rule would put the responsibility on the nuclear plant
operator to notify its transmission entities that they are responsible for meeting
the requirements of the rule after it is promulgated.
As the FERC notes in the proposed rule, the Electricity Modernization Act
of 2005, contained in the Energy Policy Act of 2005, added section 215 to the
Federal Power Act, requiring the Commission-certified Electric Reliability
Organization (ERO) to develop mandatory and enforceable reliability standards,
to be approved and overseen by the FERC, and enforced by the ERO.46 The
FERC has certified the NERC as the ERO.47 In the proposed rule, the FERC
notes that most, if not all, nuclear plant operators already coordinate operations
and planning with transmission entities pursuant to interface agreements.48
Certain aspects of the FERC‟s proposed rule deserve attention by nuclear
generators and transmission providers:
1. Enforcement/Risk Factors.
The FERC proposes to increase the risk factor assigned to several of the
specific compliance requirements of the Reliability Standard.49 This would also
raise the potential enforcement stakes by increasing the severity level associated
with violations of these requirements. The FERC offers only a general
42. Notice of Poposed Rulemaking, Mandatory Reliability Standard for Nuclear Plant Interface
Coordination, 73 Fed. Reg. 16,586 (2008) (to be codified at 18 C.F.R. pt. 40).
44. Id. at 16,589.
45. Id. at 16,588.
46. Id. at 16,586.
47. Id. at 16,587-16,588.
48. Id. at 16,586.
49. Id. at 16,590.
2008] NUCLEAR REGULATION COMMITTEE REPORT 795
justification for this proposed change, stating that requirements associated with
safe and reliable nuclear power plant operation and shutdown merit higher
violation risk factors because of the reliability benefits of nuclear power and the
impact of removing a nuclear generating facility from the grid.50 The FERC
acknowledged, however, that many of the compliance requirements are
administrative in nature.51 Rather than directly affecting plant reliability, many
of these requirements serve to ensure that proper procedures are developed to
create and implement the NPIRs. The FERC nevertheless chose to assign
heightened risk factors even for these types of requirements.52 This will put a
premium on making sure that implementing procedures are comprehensive and
The proposed rule does not address a potential situation where parties to
interface agreements are unable to reach agreement about the contents of the
3. Integrated Utilities.
Another situation that is not addressed is how the NPIRs would be
implemented when a single entity functions as both a nuclear power plant
operator and the transmission owner.
C. United States Ratification of the Convention on Supplementary
Compensation for Nuclear Damage
On May 21, 2008, the United States deposited its instrument of ratification
for the Convention on Supplementary Compensation for Nuclear Damage (CSC)
with the Director-General of the International Atomic Energy Agency (IAEA).53
The CSC is an international treaty designed to create a global legal framework
governing liability for nuclear incidents.54 More specifically, the CSC is
intended to link, and supplement existing, treaties and national laws pertaining to
legal liability and compensation, in the event of a nuclear accident at a nuclear
power plant or other related facilities.55 Once it goes into effect, the CSC would
expand the nuclear liability coverage available for suppliers of goods and
services to nuclear facilities outside the United States and increase the funds
available for domestic nuclear incidents covered under the Price-Anderson Act.56
50. Id. at 16,586.
51. Id. at 16,594.
52. Id. at 16,586.
53. INT‟L ATOMIC ENERGY AGENCY, CONVENTION ON SUPPLEMENTARY COMPENSATION FOR NUCLEAR
DAMAGE – LATEST STATUS (2008),
http://www.iaea.org/Publications/Documents/Conventions/supcomp_status.pdf. [hereinafter CSC Latest
Status]. CONVENTION ON SUPPLEMENTARY COMPENSATION FOR NUCLEAR DAMAGE, INT‟L ATOMIC ENERGY
AGENCY, July 22, 1998, available at
http://www.iaea.org/Publications/Documents/Infcircs/1998/infcirc567.pdf. [hereinafter CSC].
54. CSC, supra note 52.
56. The Anderson-Price Atomic Energy Damages Act, Pub. L. No. 85-256, 71 Stat. 576 (1957).
796 ENERGY LAW JOURNAL [Vol. 29:789
In a related development, the United States enacted legislation to implement
the CSC when it passed the Energy Independence and Security Act of 2007
(EISA) on December 19, 2007.57 The EISA contains provisions in section 934
to implement the CSC, which are discussed further below.58
The United States first signed the CSC in 1997.59 Since then, the CSC has
been signed by thirteen states, and ratified by three (Romania, Argentina, and
Morocco).60 While the United States Senate has passed implementing legislation
for the CSC several times, the House of Representatives did not get on board
until the passage of the EISA. With the United States depositing its instrument
of ratification with the IAEA, the CSC has received four of the minimum five
state ratifications or approvals necessary for it to go into effect.61 The CSC will
not become effective until it has been ratified or approved by at least one more
Among other provisions, the CSC would:
Provide expanded nuclear liability coverage to United States
suppliers operating abroad;
Create a contingent international supplementary compensation
fund, to be activated in the event a nuclear incident exhausts the
primary coverage available under the domestic law where the
incident occurs. Assuming widespread adherence, the international
fund could provide nearly 500 million dollars in supplemental
compensation for nuclear damage. Half of the contingent
international fund is reserved for transboundary damage;
Provide the contingent international fund ninety percent of its
contributions based on the installed nuclear generating capacity in a
member country (with nuclear power reactors). The remaining ten
percent will be based on the United Nations rate of assessment of a
member country; and
Obligate the United States, as a party to the CSC, to contribute to
the CSC fund in the event of an accident.63
Under section 934 of the EISA, the financial responsibility for contributing
to the international fund would be apportioned to United States nuclear suppliers
using a formula to be developed by the Department of Energy. 64 This system is
modeled after the retrospective premium system for nuclear power plants under
the Price-Anderson Act. The CSC would also assure that potential victims of a
nuclear incident outside the United States will have general assurance of prompt
57. The Energy Independence & Security Act of 2007, Pub. L. No. 110-140, 121 Stat 149 (2007).
59. CSC Latest Status, supra note 52.
61. CSC, supra note 52.
62. The CSC will not take effect until a minimum of five states hosting at least 400,000 thermal nuclear
megawatts (MW) ratify it. CSC, supra note 52. With U.S. ratification, the total capacity of the CSC‟s ratifying
states is brought to 305,000 MW. CSC Latest Status, supra note 52. If a large nuclear state – such as France or
Japan – provides the fifth ratification, then the CSC should have enough combined MW among its ratifying
states to go into effect.
63. CSC, supra note 52.
64. The Energy Independence & Security Act of 2007, Pub. L. No. 110-140, 121 Stat 149 (2007).
2008] NUCLEAR REGULATION COMMITTEE REPORT 797
and adequate compensation in their countries in the event of a civil nuclear